Present Value Calculator
Calculate the present value (PV) of a future sum of money or annuity payments using a discount rate.
Input Parameters
Results
Present Value (PV)
Present value tells you what a future amount of money is worth today, after accounting for the time value of money. A dollar today is worth more than a dollar in the future because it can be invested to earn returns.
What is the Present Value Calculator?
The Present Value (PV) Calculator is a core corporate finance tool. It tells you exactly how much a future sum of money is worth today, allowing you to accurately value businesses, bonds, and investment opportunities.
How It Works (Formula)
Because of inflation and the ability to earn interest, getting $10,000 ten years from now is worth far less than getting $10,000 today. The calculator "discounts" the future cash flow backwards through time using an expected interest rate (the discount rate).
$$ PV = \frac{FV}{(1 + r)^n} $$
The foundational formula for discounting future cash flows.
How to Use It
Enter the Future Value (the amount you expect to receive later). Input the Discount Rate (the interest rate you could alternatively earn right now), and the number of years. The tool will output the absolute maximum amount you should pay for that investment today.